Interest Rate Parity Assume the Spot Rate Between the U

question 7

Multiple Choice

Interest Rate Parity Assume the spot rate between the U.S.dollar and the Taiwan dollar is $1 = TWD32.456.If the interest rate in the United States is 4 percent and in Taiwan is 3 percent,then what should be the one-month forward exchange rate?

• A)$0.0308
• B)$0.0311
• C)$1.0097
• D)$1.0008

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